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Switches Getting Cheaper; "Don't Bet Against Moore's Law"
Thursday, 03 June 2010 17:51


Equipment makers including Alcatel tell me routers and switches are getting 25-40% cheaper per bit for the next five years, almost certainly comparable or higher than the increase in traffic per user. That means that the total cost to deliver bandwidth to the user - other than building fiber in the last mile - will go down at most carriers if Cisco‘s traffic estimates are correct.


The industry standard figure for bandwidth costs is $1/month per user at a large, efficient carrier today. It will almost certainly be similar in 2015. Great news for consumers anywhere competition is strong. "I don't see an end to the historical trend of dropping per bit prices. I wouldn't bet against Moore's Law. In fact, there's potential we will do even better," a Cisco Vice-President confirms.


     Currently, very large users are paying $1.50-2/megabit for transit, based on actual bids to one I know. Cogent advertises $4/megabit for slightly smaller users,

towards the low end of a market for a Gig-E at $3,000-10,000. 100 GigE prices will probably be high until competition develops, but will drop under $1/megabit reasonably soon.

     50 years later, that little graph by Gordon Moore never seems to stop. Moores_law_through_2008

Last Updated on Monday, 14 June 2010 17:52